The Malta Independent 22 September 2018, Saturday

Updated: €393m in BOV assets 'seized' in Italy; BOV says ‘no other court order issued’ since March

David Lindsay Sunday, 10 June 2018, 10:30 Last update: about 4 months ago

Bank of Valletta this evening said that no other court action had been taken in its regard by Italian courts since March.

 

In reply to an article in The Malta Independent on Sunday entitled “€393 million in Bank of Valletta assets seized in Italy”, BOV said that last March the bank announced that the Italian courts had issued a "sequestro conservattivo" against the bank for the amount of €363 million.

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Contrary to the impression given in the article referred to, no other court order has been issued since. Indeed it is totally incorrect to state that “The BOV-held securities worth an equivalent of €393 million had been frozen at the time and have now been seized.”

Contrary to the impression given in the said article, none of the bank’s assets have been seized or confiscated. To ensure seamless continued banking operations, the Bank placed on its own initiative the whole amount of the sequestro conservattivo with another bank, pending the appeal proceeding. However, these assets still belong to the Bank, held in the Bank’s own name and for its own benefit. Therefore, nothing has changed since the bank’s statement of last March.

As already announced in March, the Bank has appealed the court decision authorising the issuance of the sequestro conservattivo and the hearing of that appeal has not yet taken place. The article also fails to correctly report the very allegations being made by the plaintiffs against the Bank and contains various other incorrect statements. For example, the Bank was never in possession of any funds as a trustee when it was established in 2009, and the only trust assets it held consisted of shares in a Madeira registered company, part of the Deiulemar Group, which was declared bankrupt in 2012.

The bank reiterates that it is determined to take all the action required in any forum to defend itself against the unfounded allegations being levelled against it in the Italian Court of Torre Annunziata, as and when necessary. In the meantime the Bank will keep the market informed of any material developments in this case. The Bank will continue to update regulators on any developments as they arise. 

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The Malta Independent on Sunday article below:

The insolvency administrators of bankrupt Italian shipping company Deiulemar have seized €392,774,566 in Bank of Valletta negotiable securities held in Italy, according to an Italian court notice issued on Friday.

Italian prosecutors have alleged that Bank of Valletta allowed Deiulemar's owners to set up three trusts, into which the owners are accused of having funnelled illicit funds. BOV also served as a trustee for all three trusts: Capital Trust, Trust Gaino and Trust Gilda.

Deiulemar's insolvency administrators, together with representatives of 13,000 Italian bondholders from Torre del Greco, had filed the court application against BOV after the bondholders found they had lost their life savings the shipping line's owners illicitly transferred assets to trusts in Malta, Switzerland, Madeira and the British Virgin Islands.

The BOV-held securities worth an equivalent amount of €393 million had been frozen at the time and have now been seized.

The multi-million euro sum was held in trust in Bank of Valletta accounts linked to the owners of Deiulemar, whose 2012 collapse had led to seven people being jailed for fraudulent bankruptcy.

The trusts in question, however, are believed to have held over €600 million back in 2013, leading to concerns that illicit gains were being secretly transferred elsewhere to prevent the 13,000 people who invested in the company to recover their investments.

The Deiulemar shipping company, which was based in the city of Torre del Greco, Naples, had accumulated some €900 million in debts before its collapse, which was deemed a case of fraudulent bankruptcy by a court in Rome.

Investigators believe that the owners illicitly transferred assets to trusts in Malta, Switzerland, Madeira and the British Virgin Islands to avoid exposure to creditors.

The shipping line's owners had allegedly been engaged in asset stripping since at least 2005, through the setting up of numerous companies which were often based overseas. Profitable assets were sold off, with the proceeds going to the owners themselves rather than to settle the company's mounting debts.

Such practices had ultimately led to the harsh sentences against those involved, but investors are still facing an uphill struggle as they struggle to recover their funds. Many people have lost their entire life savings, and they are holding Bank of Valletta to account for those losses.

Seven of the company's owners were jailed, with the heaviest jail terms - 17 years and two months each - reserved for brothers Angelo and Pasquale della Gatta, the two sons of one of the company's three founders. Their sister Michaela della Gatta was jailed for nine years and 10 months, while their mother Lucia Boccia was jailed for eight years.

The only surviving member of the company's founding trio, Giuseppe Lembo, was jailed for 15 years and eight months, while his sister Marialuigia Lembo - the widow of the third founder - was jailed for nine years and two months. Her daughter Giovanna Iuliano was jailed for 10 years and two months.

Back in April 2015, BOV said that "legal proceedings were instituted against the bank before the Tribunal of Torre Annunziata (Italy), in terms of which the bank is being requested to pay an equivalent to the value of the shares of a company which had been settled on trust with the bank in 2009, and which value the plaintiffs are alleging amounts to €363 million".

Last March, BOV stated, "Legal proceedings in Italy are still at the preliminary pleas stage, and the Tribunal has not yet started hearing the case on its merits. As part of these litigation procedures, the bank has received notice that the Italian Tribunal has issued a precautionary warrant (sequestro conservativo) for €363 million against the bank."

Last March, Bank of Valletta said it believed it had a strong case in appealing against what was an Italian precautionary warrant for €363 million issued against the bank at the time: "The Board of Directors, after taking legal advice, believes that it has a strong case both on the merits and in appealing the sequestro conservativo and is firmly rebutting the claims instituted against it before the Italian Tribunal. At the same time, the bank is keeping its Regulators continuously updated on developments relating to this case. The bank will continue to keep this matter under review and take such measures to ensure that its operations are not adversely affected."

BOV's arguments, however, appear to have fallen flat with the massive seizure of hundreds of millions of euros of the bank's assets.


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